At the newsletter's 23rd annual presentation and state economic forecast on Friday in Burlington, Woolf said the state's already tepid recovery from the recession is being cooled by downward population trends.
"The $64,000 question, looking forward, is how to get more jobs out of a shrinking labor force," Woolf said. "Even more problematic is the state's shrinking pool of people in working age years."
Woolf said the number of Vermonters between the ages of 25 and 64 is expected to decline, with attrition coming mostly from the younger half of that age bracket. A shortage of people to pick up jobs doesn't bode well for job growth, he said.
But there have been steady increases in health care - likely a natural outgrowth of Vermont's aging population. And women have picked up most of those jobs, said newsletter publisher Dick Heaps. Women also are dominating job growth in the professional services sector.
However, Vermont women are losing ground at a faster rate than men in the state's other dominant industries: manufacturing, retail, leisure and hospitality and wholesale.
"This is an aberration," Heaps said. "Vermont is a flea on the tail of the dog. Usually." But the data revealing women's diminishing role in the workforce are a mystery, he said, especially because it's not consistent with national trends.
In addition to the anomalous gender imbalance they pointed out, Woolf and Heaps tempered a cautiously optimistic update on the national economy from Gus Faucher, vice president and senior macro-economist at PNC Financial Services Group.
Faucher pointed to a slowly recovering housing market, shrinking trade deficit and slight upswing in business investment as his sources of hope.
Woolf and Heaps gave a less rosy forecast for Vermont. Their predictions for the state's economy are, in part, a function of Vermont's historical relationship to the national stage: Vermont tends to follow national trends, but to a lesser degree.
This helped during the recent economic collapse, when the state's economy didn't fall so hard. But it also means recoveries tend to be less dramatic. Given that the U.S. recovery is unfolding slowly, Woolf and Heaps characterized Vermont's climb as incremental.
Average median income in the state has ticked up slightly since 2008, but solid growth in the previous decades had leveled off since 2000. Coming out of the dip doesn't mean much in the bigger picture, Woolf said.
Likewise, it's good that the housing market is stable, but he finds little lift to help raise real estate values in most of the state.
And the state's relatively low unemployment rate is not likely to get any better, he said, especially with that job growth problem.
Faucher suggested that immigration may help other states struggling with the workforce decline issue. Woolf places less hope in that basket.
"I really don't have a good answer for how we're going to have job growth, given the underlying population (trends) in the state," Woolf said.
Complex conditions that drive competition for businesses in other regions make it hard for Vermont to offer much of a bargain, he said.
Judging by history, Vermont could be simply returning to its long-term trends, he said. After all, the 1960s through 1990s were the only decades since the 1800s when state population growth rate matched that of the rest of the country. Before the 20th century influx, Vermonters left the state in droves to seek their fortunes elsewhere.